Black Earth



The Black Earth, or chernozem (???????? from the Russian words for "black soil," chernaia zemlia), region is a belt of extremely rich and fertile soil stretching from the Moldova and the Western Ukraine eastward, narrowing as it goes further east into Siberia, before coming to an end near Irkutsk. This is some of the richest soil in the world.






The chernozem contains a very high percentage of humus, anywhere up to about fifteen percent, and also important organic minerals such as phosphorus and ammonia. The depth of the chernozem has been measured at anywhere from forty to two hundred and fifty inches, but is usually about a foot deep. Because it very fertile and does not require any fertilizer, it is considered some of the best soil in the world for growing grains. The "black earth" region of Ukraine extends throughout about two-thirds of the country.

For centuries the Black Earth region was mainly steppe, open grasslands with no real agricultural being carried out. The problem was that the upper level of the soil was so thoroughly entangled with roots, that it proved impossible to cultivate with wooden ploughs. Only when steel-tipped ploughs were introduced in the early nineteenth century did agriculture become important. With more improved machinery and efficient cultivation techniques, the Black Earth region really emerged as the bread-basket of Russia at about the turn of the twentieth century. The region proved to be enormously important to the industrialization of Russia that was carried out by Sergei Witte because Russia could now export wheat to make money to invest in its industrial development. During the collectivization and industrialization of the Soviet Union as part of Stalin's first five-year-plan, the Black Earth region again bankrolled industrial development in the country by exporting wheat from the Soviet Union, but this time widespread famine resulted throughout the region as not enough wheat was saved for domestic consumption.

Map of Russian Black Earth Region

Acquiring Black Earth Farmland

When agriculture prices were soaring last year, a lot of investors bought up thousands of hectares of Russian farmland. Now, since the price of food staples crashed last year, many of these same investors want to get out, and it is not a problem to find properties of all sizes, from 3,000 to 50,000 ha, in almost every oblast in the Black Earth Region.

The property I visited yesterday was 3500 ha ($650 per ha), with 700 ha of orchards, but the list of properties available right now is nearly endless. Below are four other properties in Tambov that are on the market.

1. Oblast: Tambov
2. Region: Raskazovo
3. Size: 8000 ha (contiguous)
4. Possibilities for land acquisition nearby: many
5. Condition: actively farmed
6. Soil quality: excellent
7. Road infrastructure: good
8. Rail spur: Yes
9. Equipment: new John Deere
10. Price: $600 / ha without machinery and buildings
11. Storage: 50,000 ton elevator nearby also for sale for $6 million

1. Oblast: Tambov
2. Region: Uvarovo
3. Size: 4000 ha (contiguous)
4. Possibilities for land acquisition nearby: many
5. Condition: actively farmed
6. Soil quality: excellent
7. Road infrastructure: good
8. Rail spur: No
9. Equipment: Old Russian.
10. Price: $550 / ha without machinery and buildings
11. Storage: None

1. Oblast: Tambov
2. Region: Petrovskii
3. Size: 30,000 ha (contiguous)
4. Possibilities for land acquisition nearby: many
5. Condition: actively farmed
6. Soil quality: excellent
7. Road infrastructure: good
8. Rail spur: No
9. Equipment: New John Deere
10. Price: $650 / ha wi thout machinery and buildings
11. Storage: Large elevator complex nearby

1. Oblast: Tambov
2. Region: Rzhaks
3. Size: 5,000 ha (contiguous)
4. Possibilities for land acquisition nearby: many
5. Condition: actively farmed
6. Soil quality: excellent
7. Road infrastructure: good
8. Rail spur: No
9. Equipment: Old Russian.
10. Price: $700 / ha without machinery and buildings
11. Storage: Large elevator nearby

It would be no problem to acquire up to 200,000 ha over several oblasts (regions). There are 7 oblasts in the black earth region, covering about 30 million hectares. Price per hectare varies from $450 - $750 depending on soil quality and what condition the soil and fields are in. In general the price per ha is quite uniform across the region.

The PPM for Regia Russia Agro Fund Ltd (the fund I am starting to invest in Russian agriculture) is virtually done. We are in the process of setting up the Goldmoney account to receive funds. Email me if you are interested in investing.